10 things to consider before buying a New York City brownstone

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While deservedly occupying a marquee position in many New Yorkers' real estate fantasies, brownstone ownership comes with more than just bragging rights, breathing room, a backyard and a place to stash visitors. Particularly if you're accustomed to co-op or condo living, you will quickly discover that brownstones are a more hands-on investment than any other New York City abode.

Below, a few things to consider before becoming an urban homesteader:

1. Upkeep and responsibility

Unlike a co-op or condo, “If anything goes wrong with the property, it’s the owner’s responsibility to get on the phone with the contractor or electrician,” says David Schorr of Heddings Property Group. “You can’t just call up your super and say 'I’ve got a problem.'” That goes for everything from mice problems to cleaning up snow, litter and even human waste.

You also need to be proactive about making repairs to the roof and boiler every few years and ensuring that the plumbing stays in working order.

Note that owners with more than two rental units are responsible for providing trash services and may hire a management company to oversee that, in addition to tasks like snow removal, trash services, handling of rental applications, lease preparation, and rent collection for owners.

2. Amenities? What amenities?

Brownstones don't have doormen, concierges or other co-op/condo amenities. That said, installing a remote doorman system, such as Virtual Doorman, that can even receive packages can go a long way toward easing inconveniences.

Since it's rare to find an elevator in a brownstone, you should also consider the time (and energy) you'll be spending going up and downstairs.

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3. Violations and open permits

Checking with the Department of Buildings for violations and open permits on a building, advises real estate attorney Lisa Breier Urban. Otherwise, she says, you’re setting yourself up to have a problem with financing.

“If the bank sees any violations or permits, they are going to want those items either cured or escrowed before they’ll lend the money,” Urban says.

Also, once you close it becomes your responsibility, not the seller’s, to pay for these violations, some of which can cost thousands of dollars.

4. Inspection contingency

Before you close, make sure the brownstone passes muster by a licensed inspector.

“Make sure that your offer is contingent on an inspection report,” advises Rogers. “You want to make sure before you buy that the building is in good shape structurally.”

Brownstones can have problems not found in modern buildings like termites and lead paint, says real estate agent Anthony DelleCave of Citi Habitats.

The inspector should ensure that the beams are still intact, that there’s a proper drainage system in the basement and that the heating system and boiler are updated (a gas boiler is cleaner, safer and cheaper than an oil boiler, notes DelleCave ).

They should also check the roof and floors for sagging and make sure that renovations can be done based on the brownstone’s existing structure.

5. Possible landmark status

Make sure to check whether the brownstone is in a landmarked district like Brooklyn Heights or Fort Greene.

“When a block is landmarked you are limited to what you can do when changing the façade of your brownstone,” says DelleCave.

Owners in landmark districts have to go through the Landmarks Preservation Commission to get approval to make changes to the exterior and may not be able to use certain paint colors or window frames.

Except for the rare instance where the interior is also landmarked, the owner will be able to make changes to the inside of the building.

6. Financing

Mortgage rates are usually lower for single-family brownstones than those with one or more rental units, says Keith Furer, a mortgage broker at Apple Mortgage Corp. in Manhattan.

On another note, if you get Federal Housing Administration (FHA) financing, you won't have to put down $10 million in cash to afford a townhouse. In fact, this type of loan allows the buyer to put down as little as 3.5% for a down payment. It’s also more readily available for brownstone purchases.

7. If you're buying as a mulitifamily unit, make sure it's all legal

It's not unusual to see three family homes that are actually legally designated for two families or illegal two-family homes that are actually single-family homes.

Check with the Department of Buildings to ensure that the brownstone’s actual use is in line with its legal use, otherwise the lender may not close on the loan.

Also remember that as a landlord, "depending on the number of units, there are also a number of laws to stay on the right side of," says real estate attorney Adam Stone of Regosin, Edwards, Stone & Feder, who also acts as a property manager for clients who own rental buildings.

"As the owner you must know the laws, comply with them and file the proper paperwork with the proper city or state department," he says. "For example, the owner of a building with three or more units must comply with NYC's window guard law which requires landlords to, among other things, send a window guard notice to each tenant each year and to properly install and maintain approved window guards in apartments where children 10 years old or younger reside or if the tenant requests them for any reason."

To keep you on top of these requirements, you can hire a property management firm or a law firm with property management experience.

8. Existing tenants

If you’re buying a brownstone with the intent of sole occupancy, make sure the building is being delivered vacant, says Urban.

If you’re looking to rent out units, Urban advises a review of the leases for rent controlled or rent stabilized tenants.

“If you’re going to buy a building that has rent stabilized tenants in it you have to expect to have the tenants there for an indefinite period of time at the rents that they’re paying,” says Urban.

Rent regulated tenants generally pay less than market value tenants, which can factor into a buyer’s financial equation.

“With regulated tenants there are many filing requirements and regulations that govern the landlord-tenant relationship,” adds attorney Steven Wagner of Wagner Berkow. “Someone who is uninitiated in these laws and regulations may have difficulty complying.”

9. Insurance issues

In the event of damage (or, say, a bad storm), most insurance policies will not cover the restoration costs of a brownstone’s original features such as crown moldings and mahogany, warns apartment insurance broker Jeff Schneider of Gotham Brokerage.

The policies that do cover extensive repairs are considerably more expensive; be prepared to spend as much as 40% more than what you would on a standard insurance policy.

10. Property taxes (the silver lining)

Brownstone buyers can also expect to save on property taxes, says Rogers.

One-to-three family homes are in a different tax class than co-ops and condos, so the method of calculation is different. Taxes for condos are especially high compared to what you’ll be paying in taxes for a brownstone. And, since Brooklyn brownstones tend to have lower price tags to the ones in Manhattan, those can also offer lower tax costs.

Let Triplemint's off-market team give you exclusive access to apartments and brownstones in your price range and desired neighborhood that no one else has seen. More options, less competition, no bidding wars.

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